Your Knowledge and View About Credit Cards?

Question

The person with the most in-depth complete answers for the following questions will be awarded best answer.

I am a high school Business Education teacher who is in the process of taking all of the my lesson plans and writing a book about credit cards. I am finding that as I teach this subject, many of my students, as well feedback I receive from parents shows many of them have no idea what credit cards are really about and the math involved. Please answer the following:

1) Either through your parents, or during your public school

years did you learn anything about personal finance or

credit cards? If so, what did you learn?

2) Why do you think (not feel), but think you need a credit card

to survive?

3) Have the media, friends, or family members played a part in your getting or wanting a credit card? How?

4) What do you not know or understand about credit cards you

would like to learn?

5) Be honest. Do you know very little about credit cards, but

signed up for one anyway? Why?

Answer 1

1) My parents didn't tell me anything about finances. They told me it was a good idea to save but I never saw them put that into practice. Now when they should be embarking on retirement, they've had their home and 2 vehicles repossesed and are renters again. My dad in particular was a big spender and only ever made enough to finance his next spending spree (vacation, clothes, cars, etc....) They only used cash and used my name to qualify for a vehicle (without my knowledge).

Once my 6th grade teacher asked who had savings accounts, sadly I was the only student who didn't raise their hand. This really embarrased me and I pleaded with my mom to get me an account and I've been trucking ever since.

2) A credit card is the most frequently reported item (monthly) on a person's credit bureau. A person's credit score so often teeter's on their credit card spending. If you read/listen to reports you'll hear journalists say "Americans have over x*x dollars worth of credit card debt". Even though there are several types of debt, vehicle, mortgage, it seems credit cards are the ones that do the most damage because they are the most accessible. For this reason, the priviledge of having a card will open financial doors to the uers future. Use it wisely and sparingly (like food) and you'll be in good health. Hotel, car, utility accounts thrive on the use and recognition of credit. It's a way of life. It's not imposible to live without it, just makes it a lot easier.

3. I was approached by Visa on my college campus. They told me about all the great perks and even called me to see if everything was ok because after nearly a year I hadn't used it. No one ever told me the implications of having a late payment. Like if the bill was due on the 15th but I didn't get paid to the 20th, I thought I'd only have to deal with a minimal penalty fee like an extra $2-3. I had absolutely no idea that this was reported to the credit bureau and lowered by score, which I also never knew I had.

4) I've always wondered why a card user must abide by the issuer's rules, yet the card company can just up and change your terms, conditions and credit limit. I've heard so many stories of good standing clients who have their limits dramatically reduced and they are never given an explanation as to why. I would like to know why card companies offer teaser rates ie) 1% interest for the first 6 months and then it shoots way up after that. I have good credit and still have to pay the public going rate of about 15%. I always pay in full so it doesn't bother me but what if one day I couldn't?

5) I didn't understand that not all cards are created equal. I used to think that the only difference was Visa vs Mastercard and the bank that issued them. I only knew about reward cards years later.

Good on you for writing a book, I'd love to read it and I'm sure millions of others would to. Good luck

Answer 2

1. I learned about personal finance from school. There was a class called Consumer Finance that was required to graduate. To be honest, I really did not learn anything that stuck. It was all about making sure you did not max out your new credit card once you turned 18 and received one. I still did it. I just paid it all off and I am about to be 22 years old. My parents never really talked to us about credit. I signed up for my first credit card and the APR was really high but my mom let me sign up for it anyway. I think it started at 25%. I have since lowered it to 10.

2. Once my cards are paid off, which should be in about a week (finally), I think I will only need those credit cards for emergencies. For example, I go to school about 700 miles away from home. If needed to get home for an emergency, I can buy a plane ticket and put it on my credit card. That is only if I am broke (which is likely) or will have the money later but need to get home sooner than that. I don't own a car  yet but if I did, then I would use the credit card for emergency repairs that I don't have the money for yet but will have it soon. For me, I will not use it to go shopping. I did that earlier when I first got the card and I am just paying it off. I also think I need it because it teaches me to be responsible with my money. I don't want to pay a company fees because I used my credit card instead of my regular debit card. That makes no sense

3. Well, all those credit card commercials has definitely played a role in wanting a nicer credit card or one with more benefits. However, at the same time, I really dont want another credit card to have to deal with while I am still in school. Family members have not. My mother really does not want me to get another credit card until I finish my Bachelors and even my Masters. So, in about 4 years I will be able to get a new card. By then, I can assess how much I am making after graduating, how much my student loans are, and if I need yet another credit card. I currently have two so I doubt I will get another one.

4. What I would like to know about credit cards is how they evaluate giving their customers credit increases. Also, what if you do not want the credit increase but you get it anyway. For example, around the 1st of the year, my credit limit doubled. I really did not need this extra credit. I understand they want to make more money by increasing my credit limit they think I will spend more. However, all I wanted to do was not use it because it gave me more room for the emergencies. It just made me want to pay it off more. Another thing is why do credit inquiries stay on your credit for up to 7 years. To me that seems a little excessive. I can understand bankruptcy staying that long but a couple of credit inquiries should leave after a couple months.

5. When I signed up for my first credit card, I knew a little about them. I understood that you could charge something on your card but the fact about paying it back did not really come with that same thought. I did not really think about paying the card off when I was using it. I never thought about how it would affect my credit report and that I would get denied for other credit cards because my credit was trashed because of that one credit card. I honestly think that schools need to require a class be taken in the senior year of school. I took my required class as a freshman to get it over with. Therefore I totally forgot about everything I had learned when I signed up for that first cred it card.

Answer 3

1. My parents taught me a little bit about credit cards. And cautioned me to avoid them. "Borrowing on your future." Is the term they used. That's about all. Public school in California never said anything about them. Even in my economics class senior year.

2. I THINK I need a credit card for emergencies that are above my current means. I KNOW if I didn't have a credit card I'd have money in savings that could cover most needs. I THINK I need a credit card for purchases like airplane tickets or rental cars. Especially rental cars. They want to have one on file in case you wreck the car.

3. Media plays a big part in wanting a credit card. You always see NO INTEREST for 30, 60, 90, 1 year, 2 years, etc. And you think that you can pay the debt off in time. Often you don't. Media plays on your "instant gratification" impulse by making you think that with a simple application you can get the item of your dreams.

4. I know a lot about credit cards NOW. I would like to understand how to get the idea that I NEED one out of my mindset and learn how to be more responsible with my income.

5. When I first signed up for a credit card I knew nothing. Now, many years later, I know a lot. I can amortize the interest and I know how it works. I know how balances work and how they can affect your credit report positively or negatively. I learned it all through time and sometimes just "stumbling" onto the answers.

Answer 4

1) I got my first credit card ten years ago when I was 18 years old.  My father told me to only spend what I could pay in full at the end of the month.  He explained to me how interest was calculated and told me to always pay on time.  He said if I did this I would establish good credit and that it would make my life easier.  My high school did not teach me anything about credit so I knew nothing about credit until I got my first card.

2) I do not think I need a credit card to survive but I do believe that they are very convenient and a great way for a responsible person to build good credit and save a little money.  I currently have 5 credit cards which I still pay in full every month.  I actually only use one of my cards on a regular basis because it gives me cash back every month.  At current gas prices I get 12 cents off of every gallon of gas simply for using my credit card. Most of my cards also give me automatic rental car insurance when I pay with them. I also take comfort knowing that if I lost my job or had to go a couple of months without a paycheck for some reason I could live off of my credit cards and make very low payments until I got back on my feet.  I have friends and family members that do not have credit cards and they all struggle pretty badly when they are in between jobs.

3) As aforementioned my father played a role in me getting my first credit card so I could build credit. When I was younger I got two different department store cards because I was lured by the 20% discount on your first purchase but now I just figure its not worth the hassle of having another account or inquiry on my credit. Other than that I always try to keep an eye out on the internet and in the mail for a card that might have better cashback programs.

4) I would like to know what is the maximum amount of credit cards a person can have without it negatively impacting your credit score.

5) As I mentioned earlier I knew very little about credit cards when I got my first one but I signed up for some anyway to establish credit.

Answer 5

1} I never learned about credit cards and saw my mother declare bankruptcy by 45! wish I would had someone teach me about personal finance!

2} I think this whole world is based on your credit score like for example you could be a convicted felon but if you have a good credit score then your golden, you can get the car , house, and just about anything with good credit. so you must have a credit card to build up your credit!

3} No, not really but  one of my first jobs was at Foley's dept. store and you could not get the employee discount unless you had a Foley's card , I was 16 and they gave me one!!! very bad! I had no concept of how it worked!

4} I don't understand how they can charge you such a high intrest rate and how they get away with all the random fees they pile on your card?

5} Yes, I had not a clue on how bad credit cards are and how easy they make it for you too get one, but I got one anyway because they made it sound simple and easy , and because I really wanted to buy stuff with my employee discount!

I believe there should be classes starting  in middle school about personal finance, we need to educate our children about how to take care of themselves and finances, It's just as important as s*x Ed! good luck with your book!